1) A corporation’s creditors want to be notified when the firm is dissolved so that they
can make a tender offer.
2) If a franchisee is induced to enter into a franchise contract by the franchisor’s
fraudulent misrepresentation, the franchisor may be liable for damages.
3) When the harassment of co-workers creates a hostile working environment, an
employee may have a cause of action against an employer.
4) Under the Age Discrimination in Employment Act of 1967 permits private cause of
action against employers for age discrimination.
5) In the event of a RICO violation, the government can seek the divestiture of a
defendant’s interest in a business.
6) A “living will” is a will drafted and executed during a decedent’s life.
7) Plywood & Particleboard Mill, Inc., does not use proper filters on its stacks, which
consequently pollute the air. Quinn, a Plywood & Particleboard employee, suffers
respiratory illness. To succeed in a suit against the company on the ground of
negligence, Quinn must show that he suffers from
a.a distinct harm separate from that affecting the general public.
b.a lesser harm than an injunction would impose on Plywood & Particleboard.
c.Plywood & Particleboard€s failure to use reasonable care to avert herm to Quinn.
d.the same harm as that affecting the general public.
8) Palette Paints, Inc. expends funds and takes steps to ensure that all employees are
safe on the job, that all products are safe for consumers, and that the environmental
impact of the corporation is minimal. Palette Paints appears to believe in the concept of
a.the moral minimum.
b.corporate social responsibility.
c.”grey areas” in the law.
d.government oversight.
9) Fact Pattern 3–B1
Destiny and Enzo engage in a business transaction for the creation and baking of a cake
and other pastries and desserts for Destiny’s wedding dinner and reception. When a
dispute arises, Destiny initiates a lawsuit against Enzo by filing a complaint.
Refer to Fact Pattern 3-B1. If Enzo files a motion to dismiss, and the court grants it,
a.Destiny will be given time to file an amended complaint.
b.Destiny will have a judgment entered in her favor.
c.Enzo will be given time to file another response.
d.Enzo will have a judgment entered in his favor.
10) Sea & Surf Corporation makes sailboards, which are bought and distributed by
Tropical Marketing Company to UV Sports Stores, Inc., which sells them to consumers.
Wen is injured while using a Sea & Surf board that he bought from UV Sports. In a
product liability suit based on strict liability, Wen may recover from
a.Sea & Surf only.
b.Sea & Surf, Tropical Marketing, or UV Sports.
c.UV Sports only.
d.none of the choices.
11) Kimberly, the owner of Littleton Cinema, trusts Max to manage the theater’s daily
cash flow. One night, without Kimberly’s knowledge or consent, Max takes and keeps
$1,000 from the receipts. This is most likely
a.embezzlement.
b.larceny.
c.robbery.
d.burglary.
12) Grid Tool Company makes and sells tools and other hardware supplies. To cover
injuries to consumers if the products prove defective, Grid Tool should obtain
a.disability insurance.
b.health insurance.
c.liability insurance.
d.life insurance.
13) Rita eats Salsa Caliente made and sold by Salsa Zest Corporation and becomes ill.
Rita files a suit against Salsa Zest, alleging that its product was not merchantable.
Merchantable food is food that is fit to eat on the basis of
a.consumer expectations.
b.what constitutes a perfect condition.
c.its maker’s intentions.
d.its producer’s experience.
14) Nazih and Ovidia are limited partners in Physicians Medical Center, a limited
partnership. In terms of the firm’s books and information regarding partnership
business, Nazih and Ovidia are entitled to
a.access in proportion to their participation in management of the firm.
b.access to the parts that directly relate to their capital contributions.
c.no access.
d.complete access.
15) Largo is an agent for Mary Elise. Mary Elise gives Largo clear instructions to enter
into contracts on her behalf only on Mondays, Wednesdays, or Fridays. Largo enters
into a contract on her behalf on Tuesday. Largo has breached
a.the duty of performance.
b.the duty of loyalty.
c.no duty.
d.the duty of obedience.
16) Debit & Credit Financing, Inc., and Equity Lending Company are secured parties
with security interests in property owned by Fleet Shipping Corporation. Priority
between these security interests is generally determined by
a.the amount of the claim.
b.the custom in the trade.
c.the time of perfection or attachment.
d.the “float” of the liens.
17) Fact Pattern 25-1B
Thalia signs an instrument unconditionally promising to pay to “Union Bank” $7500
with interest in installments with the final payment due June 1, 2017 .
Refer to Fact Pattern 25-1B. The instrument that Thalia signed is most likely
a.a certificate of deposit.
b.a draft.
c.an order to pay.
d.a promissory note.
18) When no delivery terms are specified in a contract for a sale of goods, there is no
basis for determining a remedy.
19) In most situations, when a breach of contract occurs, the innocent injured party is
held to a duty to mitigate the damages.
20) When a party’s performance is perfect, it is said to be complete.
21) Express warranties displace inconsistent implied warranties with no exception.
22) To constitute an express warranty, a representation must be in writing.